MINING MATTERSSocial issues get top priority on CEO’s agenda at Anglo American

After working in leadership positions for a variety of multinational mining companies, Mark Cutifani in April 2013 became chief executive of UK-headquartered Anglo American plc, one of the world’s largest mining companies and the parent organization of De Beers, the preeminent name in diamonds.

Anglo American plc Chief Executive Mark Cutifani’s principles of leadership are remarkably simple and clear: Measure what you value, partner with the communities where you operate, inspire your workforce and be relentless in the pursuit of process improvement.Every company would do well to aspire to such precepts, but few pursue them with as much conviction as Anglo American, the world’s largest producer of platinum; a major producer of diamonds and bulk commodities including iron ore and coal; and of base metals including copper – and Cutifani sets the tone.

When discussing how he defines business success, for example, Cutifani starts with safety and environmental performance, followed by how well the company is honoring its commitments to communities. Only then does he pivot to more familiar business issues, such as cost control, meeting customers’ demands and delivering competitive returns on investors’ capital.

“Diversity is in our DNA.”

Mark CutifaniChief Executive, Anglo American PLC

A LIFETIME IN MINING

Cutifani, 57, was born in Wollongong, Australia, and has devoted his entire professional life to mining. In 2013 he joined Anglo American, whose revenues were about US$29 billion. Over the years, he also held senior executive positions at half a dozen other multinational mining companies, including serving as CEO of AngloGold Ashanti Limited, headquartered in Johannesburg, South Africa.

US$29 billion

Anglo American’s 2013 revenues were approximately US$29 billion.

Mining was not Cutifani’s initial career preference, however. He first thought he wanted to become a lawyer. But after enrolling in Wollongong University in New South Wales, Australia, he signed up for engineering-related mining courses. His eureka moment came after two years of studying minerals and the science of extraction. “I started to really understand all of the potential opportunities that mining offered – world travel, engineering, the human resources side,” he recalled. A part-time job at a mining company also gave Cutifani the means to pay for his own education.Articulate and straight talking, Cutifani could be mistaken for a human resources professional instead of a captain of industry. For example, he is positively passionate about what it takes to motivate and realize the potential of a workforce, which relates to his definition of leadership. Former US Secretary of State Colin Powell best expressed it, Cutifani said, paraphrasing: “Leadership is the art of accomplishing more than the science of management says is possible.”

EMPLOYEE IDEAS DRIVE SUCCESS

Cutifani has found that the best way to optimize the many processes needed to run a large enterprise is by involving the people who live them every day. “Usually they can find ways to squeeze more out of (a process) than you could ever have thought of, because the commitment of people to what you are doing will always give you the (competitive) edge,” he said.Anglo American has about 120,000 employees working across six continents. “To be brutally honest,” Cutifani said, “not all of them are universally motivated. It’s not that they don’t want to give their all, but we’re a long way from where we could be.” The opportunity for Anglo American, he said, is to connect with people in every part of the organization. “There is a 30% to 50% productivity improvement available in our processes if we can make that connection. We’ve got to be clear in articulating our vision.”Of course, it takes more than a well-articulated vision to inspire employees to do their best work, Cutifani noted. Management must make sure employees have a meaningful role that they understand, provide direct feedback and recognize good work. “It’s about us making personal connections and making sure people feel a part of it,” he said. “It’s important that people know you care.”Cutifani is a big believer in hands-on management, so it should come as no surprise that he personally engages employees whenever he gets the chance. “Probably the only real feedback you get is from the shop floor, because they can tell you whether the message that you are delivering through six or seven layers is getting through,” he said. “If it’s not, I learn pretty quickly at a (work) site.”ezembed

DEEP GLOBAL EXPERIENCE

‘Connecting,’ whether it’s with workers or communities, is a skill that Anglo American has developed by managing the diversity of its products, markets and presence around the world. Many years ago, Anglo American was involved in manufacturing, owned sugar mills and ran a forestry business. But community outreach is one of its top accomplishments. For example, Anglo American was the first company in South Africa to offer anti-retro viral treatment to HIV-positive people, and it has been a groundbreaking company in providing health care for its employees, even operating its own hospitals.

“The shop floor . . . can tell you whether the message that you are delivering through six or seven layers is getting through.”

Mark CutifaniChief Executive, Anglo American PLC

“We have a unique history of understanding diversity, global business and how to connect with communities, even in remote areas, and so diversity is in our DNA,” Cutifani said. Because many of the company’s sites are located in remote, difficult-to-access regions, “we understand the need to work with local communities in trying to make a positive difference.”Business-wise, Anglo American’s extensive experience in southern Africa and remote parts of South America equip it to operate in a wide range of business environments, regardless of location and local culture – an invaluable skill for a multinational company.

INNOVATING FOR A NEW AGE

Another one of Anglo American’s particular skills, Cutifani said, is conceptualizing how to effectively compete in a dynamic environment, and thus be more innovative. For example, the company will make use of next-generation business-application software to stimulate innovation and improve operating efficiencies.Anglo American’s business innovation platform and its approach to the design of its business go hand-in-hand since both help people visualize and develop ideas. Ordinarily, identifying and prototyping ideas can be very time-consuming, Cutifani said, so the ideal IT platform should enhance and put three dimensions around concepts, providing the means to dynamically test ideas and pull concepts together more rapidly. Anglo American’s business innovation platform has shown that it is up to the task, Cutifani said, proving its worth. The challenge for the mining industry as a whole, he said, is to develop individuals with the foresight and ability to use such technologies. “The beauty is (our innovation platform provider) has the people who can help us get there.”

A BALANCED APPROACH

For Cutifani, optimizing underlying processes is critical to running a successful business. The potential upside is huge: If a company can learn how to extract full value from its process technologies, Cutifani said, it has the potential to boost revenues by up to 20%; on top of a 20% margin, he said, such an improvement could double the value of a business.As important as it is to keep investors happy, Cutifani believes it is only one component of success. “You have got to think about the metrics that you set for the business in demonstrating your vision, your mission and your values,” he said. “People need to understand that what’s important to you is delivering outcomes for all of your stakeholders, not just your shareholders.”